COBALT successfully represented UAB Skonis ir kvapas before the European Court of Justice in the case against the Lithuanian State Tax Inspectorate

COBALT successfully represented UAB Skonis ir kvapas before the European Court of Justice (CJEU) in the case against the State Tax Inspectorate (STI) regarding the classification of cigarillos in the category of cigarettes and the resulting increase of excise duty.

The case concerned the classification of tobacco products for excise purposes. In the view of the Lithuanian tax authorities, cigarillos, which are visually similar to cigarettes, may be classified as cigarettes, which are subject to a higher rate of excise duty. On that basis, the tax authorities had charged the company a significant amount of tax. However, the CJEU sided with the position of the company and interpreted in its favour the European Union legislation the provisions of which are transposed into the Republic of Lithuania Law on Excise Duty. On the basis of the CJEU judgment, the case pending before the Supreme Administrative Court of Lithuania was closed. By its ruling of 12 June 2019, the Lithuanian court dismissed the appeal of the STI and upheld the decision favourable to UAB Skonis ir kvapas.

UAB Skonis ir kvapas has been operating for 20 years, specialising in the sale of gourmet tea, coffee, handmade sweets, tea and coffee accessories, and tobacco products. The company runs more than 50 specialised stores and produces and supplies its products to partners all over Lithuania and European countries.

COBALT team drafted all the procedural documents and represented the client in court. The team consisted of Partner Rokas Daugėla, Partner Dr Paulius Markovas, and Associate Lukas Pultaražinskas.